Vodafone class action reopened on appeal (updated)
UK/USA - An appeal by plaintiffs in a class action against Vodafone, including Lothian Pension Fund, has resulted in the case being reopened after it was originally dismissed over jurisdiction issues.
Edinburgh City Council brought the complaint, on behalf of the £2.6bn (€2.95bn) Lothian Pension Fund, in November 2007 over its purchase of the German telecoms company Mannesmann, claiming the company had "artificially inflated the company's stock price through allegedly false statements about its financial health and business prospects".
It was subsequently appointed lead plaintiff and reported losses of around £2.3m. However, P. Kevin Castel, US district judge for the southern district of New York, dismissed the complaint in December on the basis that the case was outside of US jurisdiction. (See earlier IPE article: Lothian action against Vodafone is dismissed)
At the time a spokeswoman for Lothian Pension Fund revealed its lawyers were "appealing on points of law", and Judge Castel last week reopened the case after admitting the court had "overlooked" a US pension fund's status as a plaintiff.
Lawyers for Edinburgh City Council - Coughlin, Stoia, Geller, Rudman & Robbins (CSGRR) - said the Sterling Heights Police and Fire Retirement System had been added as a plaintiff shortly before the motion to dismiss had been filed, in an effort to "address any perceived concerns about [Lothian's] ability to represent the entire Class at this juncture in the litigation".
Judge Castel has therefore ordered the clerk of the court to reopen the case and although the full dismissal has been reconsidered, and the court document noted that the motion to reconsider the dismissal of Lothian had been denied.
That said, the judge confirmed it would examine arguments that the court should exercise "supplemental jurisdiction" over Lothian's claims as part of a future ruling which considers Vodafone's motion to dismiss against the claims of the Sterling Heights pension fund.
Patrick Daniels, partner at Coughlin Stoia, said: "This case highlights the need for UK and EU investors to fight to protect their claims in US class actions, it is simply not a given that everyone will always be included. UK funds are increasingly monitoring their US class action claims and taking steps to protect their interests where needed."
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